Cerner Reports First Quarter 2008 Results.Strong Earnings Growth, Bookings, Margin Expansion, and Cash Flow; Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. Program Announced KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo. -- Cerner Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CERN CERN or European Organization for Nuclear Research, nuclear and particle physics research center straddling the French-Swiss border W of Geneva, Switzerland. ) today announced results for the 2008 first quarter that ended March 29, delivering strong levels of bookings, margin expansion, earnings, and cash flow. Bookings in the first quarter of 2008 were $346.6 million. First quarter 2007 bookings were $353.0 million, including $50 million of higher than expected bookings from managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality contracts. First quarter 2008 bookings are 14 percent higher than adjusted first quarter 2007 bookings of $303.0 million. First quarter revenue increased 5 percent over the year-ago period to $384.8 million, with good growth in software, managed services, and support revenue being somewhat offset by declines in hardware revenue. On a Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, first quarter 2008 net earnings were $36.8 million, and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.44. First quarter 2007 GAAP net earnings were $27.7 million, and diluted earnings per share were $0.34. Adjusted (Non-GAAP) Earnings Adjusted first quarter 2008 net earnings were $39.1 million, which is 30 percent higher than the $30.1 million of adjusted net earnings in the first quarter of 2007. Adjusted diluted earnings per share were $0.47 in the first quarter of 2008 compared to $0.36 in the first quarter of 2007. Analysts' consensus estimate for first quarter 2008 adjusted diluted earnings per share was $0.44. Adjusted Net Earnings is not a recognized term under GAAP and should not be substituted for net earnings as a measure of the Company's performance but instead should be utilized as a supplemental measure of financial performance in evaluating our business. Following is a description of adjustments made to fourth quarter net earnings. For more detail, please see the accompanying schedule, titled "Reconciliation of Adjusted Net Earnings and Adjusted Diluted Earnings Per Share to GAAP Net Earnings and Diluted Earnings Per Share." Adjusted first quarter 2008 and 2007 net earnings and diluted earnings per share exclude the impact of accounting pursuant to Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 123R, Share-Based Payment, which requires the expensing of stock options. The effect of accounting under SFAS 123R reduced first quarter 2008 net earnings and diluted earnings per share by $2.2 million and $0.03, respectively, and reduced first quarter 2007 net earnings and diluted earnings per share by $2.4 million and $0.03, respectively. Other First Quarter Highlights: * Cash collections of $427 million and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of $51 million, up from $42 million in the first quarter of 2007. * Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). of 92 days compared to 89 days in the year-ago quarter. * Total revenue backlog of $3.35 billion, up 21 percent over the year-ago quarter. This is comprised of $2.79 billion of contract backlog and $555.7 million of support and maintenance backlog. * Completed 394 Cerner Millennium([R]) solution conversions. Cerner has now turned on nearly 8,000 Cerner Millennium solutions at nearly 1,300 client facilities worldwide. "We are pleased with our results in the first quarter," said Neal Patterson Neal L. Patterson is CEO of Cerner Corporation, a Kansas City-based medical software corporation. Cerner was founded in 1979 by Patterson with Paul Gorup and Cliff Illig. Patterson was featured in a USA Today , Cerner co-founder, chairman and chief executive officer. "While declines in revenue from hardware sales, a non-core element of our business, continue to impact our overall revenue growth, our fundamentals remain sound, as evidenced by the strong margin expansion, earnings growth and cash flow growth we delivered this quarter. "We believe Cerner offers a significant value proposition to healthcare, the largest segment of our economy. And the substantial value of the large and strategic client base we have built over the past 29 years, coupled with our strategic initiatives that are expanding our boundaries to address a much bigger portion of healthcare, position Cerner for another wave of strong growth," Patterson said. Future Period Guidance The company expects revenue in the second quarter of 2008 to be approximately $390 million to $405 million. For the year 2008, Cerner expects revenue growth of approximately 10 percent over 2007. Cerner expects adjusted diluted earnings per share before stock options expense in the second quarter to be between $0.50 and $0.51. For the year 2008, Cerner continues to expect adjusted diluted earnings per share before stock options expense to grow more than 20 percent and is therefore comfortable with the previous consensus of $2.14 per share plus the $0.03 cent over attainment in the first quarter, resulting in a full-year estimate of $2.17. The company expects SFAS No. 123R share-based compensation expense to reduce diluted earnings per share in the second quarter and full year by approximately $0.03 and $0.12 to $0.13, respectively. Cerner expects new business bookings in the second quarter of 2008 to be between $370 million and $400 million. Share Repurchase Program Cerner also announced today that its board of directors has approved a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, authorizing the repurchase of up to $45 million of common stock. At current prices, the Company believes the repurchase of stock Repurchase of stock Technique to pay cash to firm's shareholders that provides more preferential tax treatment for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. is a good use of funds. The Company plans to execute this program by repurchasing shares from time to time in the open market, by block purchase, or possibly through other transactions managed by broker-dealers. Based on today's closing price, approximately 1.1 million shares could be repurchased if the repurchase program is fully exercised. Earnings Conference Call Cerner will host an earnings conference call to provide additional detail on first quarter results at 3:30 p.m. CT, April 22. The dial-in number for the conference call is 617-213-8834; the passcode is Cerner. The company recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 5:30 p.m. CT, April 22 through 11:59 p.m. CT, April 25. The dial-in number for the re-broadcast is 617-801-6888; the passcode is 95203537. An audio webcast will be available live and archived on Cerner's Web site at www.cerner.com under the About Cerner section (click Investors, then Presentations and Webcasts). About Cerner Cerner is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 6,000 clients worldwide, Cerner is the leading supplier of healthcare information technology. The following are trademarks of Cerner: Cerner, Cerner Millennium and Cerner's logo. (NASDAQ: CERN), www.cerner.com This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties. It is important to note that the Company's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words "believe," "positions," "guidance," "expects," and "comfortable"or the negative of these words, variations thereof or similar expressions are intended to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the possibility of product-related liabilities; potential claims for system errors and warranties; the possibility of interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. at our data centers or client support facilities; our proprietary technology may be subject to claims for infringement or misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any of intellectual property rights of others, or may be infringed or misappropriated mis·ap·pro·pri·ate tr.v. mis·ap·pro·pri·at·ed, mis·ap·pro·pri·at·ing, mis·ap·pro·pri·ates 1. a. To appropriate wrongly: misappropriating the theories of social science. by others; risks associated with our global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. ; risks associated with our ability to effectively hedge exposure to fluctuations in foreign currency exchange rates; risks associated with our recruitment and retention of key personnel; risks related to our reliance on third-party suppliers; risks inherent with business acquisitions; changing political, economic and regulatory influences; government regulation; significant competition and market changes; variations in our quarterly operating results; potential inconsistencies in our sales forecasts Sales forecast A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors. compared to actual sales; and the volatility in the trading price Trading price The price at which a security is currently selling. of our common stock. Additional discussion of these and other factors affecting the Company's business is contained in the Company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial condition or business over time. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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